[Dumas]

Originally Posted by HarryT

He's paying £45/month compared to my £21/month. He doesn't have any download limits explicitly stated, but the service is subject to an "acceptable use policy", which means that if his ISP thinks that his usage is adversely impacting their network, they can impose traffic management to restrict usage.

Thanks for posting that. His data rate is about 10x mine for less cost. Nice. I can only imagine what that speed must be like if he really gets what his ISP has promised.

Originally Posted by HarryT

My ISP could certainly buy more bandwidth from BT, but then they'd have to increase the costs to their customers. My ISP offers three packages, with download limits of 50, 60, and 200GB/month respectively (there are other differences other than download caps). I subscribe to the middle one of these, because it suits my needs. The 200GB/month service would cost me £42/month - double what I'm paying now.

And therein lies what I see as the crux of the problem. For twice the cost, you would have 3x+ the data cap. No relationship to marginal cost and users on the lower plans are overpaying compared to users on the top plan.

Originally Posted by HarryT

As I've said before, though, the amount of bandwidth my ISP buys from BT isn't what's restricting my download speeds - I'm restricted by the amount of bandwidth available at my local telephone exchange.

I'm not sure, but perhaps I'm confused by how you're using the term bandwidth? When I talk about bandwidth, I'm talking about the maximum throughput of a logical/physical connection in bit/s. As elcreative says, these have limitations based on the connection medium and the electronics provisioned at either end.

Since you described how your bandwidth ebbs and flows during business hours, your local loop doesn't seem to have any capacity problems. You say if your ISP were to increase the size of its pipe to BT's backbone (and the facilities exist to do so), it wouldn't improve your throughput. Is it possible that what you are really saying is you have network congestion in your local CO?

Perhaps the congestion (and failing to implement a solution for that issue) is the real reason for the data caps. Placing caps on users in the hope they would limit their time online could be one way they might try to alleviate congestion. You haven't said if you noticed any effect on service since caps were implemented. Then again, I doubt you would because it sounds like your ISP continues to sign up new customers which contributes to more congestion. It would appear your ISP is still oversubscribing, just not in the manner I have typically seen.

I don't see how .1% of users could have been using 50% of the bandwidth given the conditions you describe. Me thinks the issue pitched might not be the real issue.

Stumbled on this related article, Should broadband data hogs pay more? ISP economics say "no". Congestion is briefly mentioned here, but its a non-issue as it relates to marginal cost. Contrary to what the telcos would have you believe, the costs are almost all fixed costs. Even though it is US focused, you and others might find it informative.